AN

INTRODUCTION
TO INFORMATION
SYSTEMS IN
ORGANIZATIONS
 Disclaimer

• I do NOT own the contents of this presentation. Ideas, facts,

opinions, and images are gathered from several sources.
• This presentation is intended for educational purposes only.
Learning Objectives
At the end of the discussion, students are able to:

• Distinguish data from information and describe the

characteristics used to evaluate the value of data

• Identify the basic types of business information system

and discuss who uses them, how they are used and what
kinds of benefits they deliver

• Discuss how organization are using information systems to

gain such an advantage
 Information Concepts

• Data, information and knowledge

– Data: Raw facts
– Information: Collection of facts organized in such a way
that they have additional value beyond the value of the
facts themselves
– Process: Set of logically related tasks performed to achieve
a defined outcome
– Knowledge: Awareness and understanding of a set of
information
 Data, Information and
Knowledge
Types of Data
Data Represented by

Alphanumeric Data Number, letters, and other characters

Image data Graphic images and pictures

Audio data Sound, noise, or tones

Video data Moving images or pictures

 Data, Information and
Knowledge

Figure a.

Figure b.

Defining and Organizing Relationships Among Data Creates

Information
Data, Information and
Knowledge

The Process of Transforming Data into Information

 The Characteristics of
Valuable Information
• If information is not accurate or complete
– People can make poor decisions, costing thousand or even
millions, of dollars
• Information can be of little value to the organization
– If information is not relevant, not delivered to decision
makers in a timely fashion, or too complex to understand
 The Value of Information

• Valuable information
– Can help people and their organizations perform tasks
more efficiently and effectively
– Can help managers decide whether to invest in additional
information systems and technology
What is an Information System?

https://www.youtube.com/watch?v=Qujsd4vkqFI
What is an Information System?

• A set of interrelated elements or components that collect

(input), manipulate (process), store and disseminate (output)
data and information and provide a corrective reaction
(feedback mechanism) to meet an objective.

• Feedback mechanism
– The component that helps organizations achieve their
goals, such as increasing profits or improving customer
service
What is an Information System?

The Components of an Information System

Feedback is critical to the successful operation of a system.

Input, Processing, Output
and Feedback
• Input
– Gathering and capturing raw data
• Processing
– Converting or transforming data into useful outputs
• Output
– Production of useful information, usually in the form of
documents and reports
• Feedback
– Output that is used to make changes to input or processing
activities
Manual and Computerized
Information System

• An information system can be:

– Manual
• Example: Developing patterns and trends on graph
paper for stock analysis

– Computerized
• Example: Using program trading to track the market and
trade large blocks of stocks when discrepancies occur
Computer-Based Information
System (CBIS)

• Single set of hardware, software, databases,

telecommunications, people, and procedures configured
to collect, manipulate, store, and process data into
information
• Information technology (IT)
– Hardware, software, databases, and
telecommunications
Computer-Based Information
System (CBIS)
Computer-Based Information
System (CBIS)
• CBIS components
– Hardware: Computer equipment used to perform input,
processing, and output activities
– Software: Computer programs that govern the operation
of the computer
– Database: Organized collection of facts and information
– Telecommunications: Electronic transmission of signals for
communications
– Networks: Connect computers and equipment in a
building, around the country, and around the world
Computer-Based Information
System (CBIS)

• CBIS components
– Internet: World’s largest computer network
– People: Manage, run, program, and maintain the system
– Procedures: Strategies, policies, methods, and rules for
using a CBIS
Business Information Systems

• Most common types of information systems used

are those designed for:
– Electronic and mobile commerce
– Transaction processing
– Management information
– Decision support
 Electronic and Mobile
Commerce

• E-commerce
– Any business transaction executed electronically between:
• Companies (B2B)
• Companies and consumers (B2C)
• Consumers and other consumers (C2C)
• Business and the public sector
• Consumers and the public sector
 Electronic and Mobile
Commerce

• Mobile commerce (m-commerce)

– Transactions conducted anywhere, anytime

• Electronic business (e-business)

– Uses information systems and the Internet to perform all
business-related tasks and functions
Electronic and Mobile
Commerce

Traditional process for placing a purchase order

Electronic and Mobile
Commerce

E-commerce processing for placing a purchase order

Enterprise Systems: TPS and ERP

• Transaction
– Any business-related exchange
• Transaction processing system (TPS)
– Organized collection of people, procedures, software,
databases, and devices used to record completed business
transactions
• Enterprise Resource Planning
– Programs that manage the vital business operations for an
entire multisite, global organization
Enterprise Systems: TPS and ERP

A Payroll Processing Transaction System

 Information and Decision
Support Systems

• Management information systems

– Organized collection of people, procedures, software,
databases, and devices
– Provides routine information to managers/decision makers
• Decision support systems
– Organized collection of people, procedures, software,
databases, and devices that support problem-specific
decision making
Information and Decision
Support Systems

Management
Information
System. Functional
management
information
systems draw data
from the
organization’s
transaction
processing system.
Information and Decision
Support Systems

Essential DSS
System
 Systems Development

• Creating or modifying existing business systems

• Systems development failures can be a result of:
– Poor planning and scheduling
– Insufficient management of risk
– Poor requirements determination
– Lack of user involvement
• Outsourcing
– Allows a company to focus on what it does best and
delegate other functions
Systems Development

An Overview of
Systems Development
Systems Investigation and Analysis

• Systems investigation
– Goal is to gain understanding of the problem to be solved
or opportunity to be addressed

• Systems Analysis
– Defines problems and opportunities of the existing system
Systems Design, Implementation
and Maintenance and Review

• Systems Design
– Determines how the new system will work to meet the
business needs defined during systems analysis
• Systems Implementation
–  Creating or acquiring the system components defined in
the design step, assembling them, and putting the new
system into operation
• Systems Maintenance and Review
– Checking and modifying the system so that it continues to
meet changing business needs
Organizations and Information
Systems

• Organization
– Collection of people and other resources established to
accomplish a set of goals
– Has inputs, processing mechanisms, outputs, and feedback
Organizations and Information
Systems
A General Model of an Organization
Organizations and Information
Systems

• Value chain
– Series of activities that includes inbound logistics,
warehouse and storage, and production
• Supply chain management (SCM)
– Helps determine what supplies are required for the value
chain and what quantities are needed to meet customer
demand
• Customer relationship management (CRM)
– Helps companies manage all aspects of customer
encounters, including marketing and advertising
RAW MATERIAL DISTRIBUTOR RETAILER
MANUFACTURER
PRODUCER
B2B B
2
C CONSUMER
Organizations and Information
Systems
The Value Chain of a Manufacturing Company
Organizational Culture and Change

• Organizational culture
– Major understandings and assumptions
– The understandings are often not stated or documented as
goals or formal policies

• Organizational change
– How organizations plan for, implement, and handle change
– Can be sustaining or disruptive
 Competitive Advantage

• Significant, long-term benefit to a company over its

competition.

• An organization often uses its information system to help

achieve a competitive advantage.
 Competitive Advantage

How Some Companies Used Technologies to Move from Good to Great

Company Business Competitive Use of Information

Systems
Gillette Shaving products Developed advanced computerized
manufacturing systems to produce
high-quality products at low cost
Walgreens Drug and convenience Developed satellite communications
stores systems to link local stores to
centralized computer systems
Wells Fargo Financial services Developed 24-hour banking, ATMs,
investments, and increased
customer service using information
systems
Factors that Lead Firms to Seek
Competitive Advantage

• Five-forces model identifies key factors

– Rivalry among existing competitors
– Threat of new entrants
– Threat of substitute products and services
– Bargaining power of buyers
– Bargaining power of suppliers
 Summary

• The value of information is directly linked to how it helps

decision makers achieve the organization’s goals.

• Knowing the potential impact of information systems and

having the ability to put this knowledge to work can result in a
successful personal career, organizations that reach their
goals, and a society with a higher quality of life.
 Summary

• System users, business managers, and information systems

professionals must work together to build a successful
information system.

• The use of information systems to add value to the

organization can also give an organization a competitive
advantage.